Lux Industries, one of India’s leading knitwear producers, would have consolidated revenue of close to Rs 1,800 cr after the merger of group companies with itself. It was announced recently that the composite scheme of amalgamation of J M Hosiery & Co and Ebell Fashions Private with Lux Industries, has been sanctioned by the National Company Law Tribunal (NCLT). The profit after tax of the consolidated unit of Lux Industries would be Rs 177 cr from the present level of Rs 122 cr. The current revenue of the company is Rs 1,210 cr.
A company official pointed out that the earnings per share of the consolidated firm would go up to Rs 58.8 from Rs 48.8 currently. The Lux scrip was hovering at Rs 1,800-1,810 level for the last few days after touching 1,899 in February 21 following the news of amalgamation.
Commenting on the operational synergies of the merger, its Chairman Ashok Kumar Todi said, “We are happy to announce that NCLT has sanctioned the scheme of merger. The merger will accelerate our single market strategy and single company brand image through merger of J M Hosiery, which deals majorly in the men’s brand GenX and merger of Ebell Fashions, which deals largely in the women’s brand Lyra.”
According to Todi, this merger enables them to increase its share in the overall wardrobe spending by offering a value-added product in mid-economy and mid-premium price category. Lux Industries, incorporated in 1995, has a market share of 14-15 percent of the organised Men’s innerwear industry.
Commenting on the financial aspects of the merger, Pradip Kumar Todi, MD, said, “We thank the NCLT for their quick approval of the merger scheme. Based on the merger scheme approved, Lux Industries will issue approximately 48 lakh new shares as consideration of the merger,” he added.
He claimed that the merger is EPS accretive even after considering the new equity base and will create long-term value for all stakeholders of Lux Industries. “Merger will also help us to increase the market share by expanding business into new geographic areas and to enter into the new segment. It will bring greater efficiency and also avoid replication.”
